What is Overdraft Protection ?
Definition of Overdraft Protection
Overdraft protection is a history of credit score that banks offer to their customers to cover their overdrafts.
Brief Explanation of Overdraft Protection
Overdraft protection kicks in when a client signs a check for more than the amount in their consideration.
It comes at a price. Although it does allow its customers to escape paying overdraft fees, it does charge interest on the sum drift to them. Many banks allow their customers to link their bank accounts to a credit card so as to avoid overdraft charges. Overdraft protection is a feature offered by banks to keep your bank checking consideration from overdrafts when you write a check or swipe your debit card but don’t have enough money in your bank checking consideration to completely fund the transaction. It links your bank checking consideration to a bank consideration, credit card, or history of credit score. Without it, any transaction exceeding the amount in your bank checking consideration would be declined. Your bank would charge you a non sufficient funds fee and the merchant to whom you presented payment would also charge a fee in addition to the original amount of the transaction. To use a credit card or history of credit score for overdraft protection, your credit score must be good enough to qualify for the money product. You’ll typically need to have a bank checking consideration and credit score product with the same bank. The exact qualification criteria will vary by bank. It is also referred to as “cash reserve checking.”